With paper machines recently started-up in Germany and France, and another PM investment announced in Poland, WEPA Group has its eyes firmly fixed on growth. TWM discusses market strategy with the company’s management board member, Hendrik Otto.
WEPA Group has recently hit the headlines with a string of impressive paper machine developments.
All supplied by Toscotec, the company’s Giershagen mill in Germany boosted its capacity to produce high-quality super-soft toilet tissue by 32,000tpy with the start-up of an AHEAD-2.0S tissue machine in October 2015. The French, Lille-based site started production on its AHEAD-2.0 crescent former tissue machine in August 2015, producing high quality tissue products and increasing capacity by 35,000tpy. And WEPA announced it had invested in an AHEAD-2.0S line for its Piechowice, Poland-based site which will start production of high-quality super-soft toilet tissue in the first quarter of 2017, boosting capacity by 32,000tpy. Hendrik Otto, member of the management board, WEPA Group, talks to TWM.
TWM/1: Why you have made these investments?
Otto: “In 2013, we analysed our mid-term demand for semi-finished products. After that, we decided to invest in a quasi-simultaneous construction of three nearly identical tissue machines. Additionally, we are optimising logistic flows within our plants in Europe. The three systems are optimised in terms of energy efficiency and contribute to reducing our CO2 emissions as well as improving the environmental footprint of the WEPA Group.”
TWM/2: What tissue market trends are you seeing that have led you to make these investments?
Otto: “We have been seeing a trend towards more and more private label products on the retailers’ shelves for years. The consumer has detected that private label and premium products are not a contradiction. From the quality perspective, private label products are not different from branded products, but consumers have a price advantage.”
TWM/3: Why are you seeing these trends in particular?
Otto: “Hygiene papers have become a natural part of our everyday lives. Who wants to give up hankies and kitchen towels or even toilet paper? We are convinced, and appropriate studies confirm this, that people’s hygiene awareness will continue to develop in the future. A corresponding growing demand for tissue is connected and, depending on the individual economic situation, will be satisfied by different paper qualities. Accordingly, the variety of products increases even in the private label sector.”
TWM/4: Are you looking to grow/invest further?
Otto: “Our aim is to supply customers optimally across Europe. For this, we are constantly investing in the expansion and development of our existing locations in Germany, France, Italy and Poland. Thereby, we can particularly optimise our logistic costs and guarantee the required flexibility in deliveries to our customers. Further investments in paper manufacturing and converting facilities will be examined comprehensively and, if necessary, implemented to maintain our state-of-the-art plants and operate as efficient as possible. In March, we also laid the first stone for a new tissue paper machine at our location in Piechowice in Poland. Just like the two machines delivered in 2015, this one will be supplied by our long-standing supplier Toscotec. In its configuration the machine is similar to the machines in Lille and Marsberg and is expected for start-up in the first quarter of 2017.”
TWM/5: How important is product innovation and environmental sustainability?
Otto: “As a family-run company, sustainability is not just limited to the ecological side. We have been active on the market since 1948 and have grown gradually since then. Today we are the third largest tissue manufacturer in Europe and keep the balance, both in economic and in environmental terms. For us this means on the one hand to produce and offer market-oriented products at reasonable prices. This includes the use of sustainable raw materials such as certified pulp and waste paper and the continuous optimisation of energy and water consumption as well as efficient manufacturing and logistics processes. On the other hand, we intend to keep the family company running in the long term and adjust ourselves to future requirements. Customer relationship, financing, investments, human resources development … these are areas we also see in terms of sustainability.”
TWM/6: What are the main opportunities for WEPA over the next five years?
Otto: “We are convinced that the demand for tissue products in Europe will generally grow in the next years. Reasons for this are the rising living standards, urbanisation and especially the growing hygiene awareness among consumers. This growth is generated disproportionately in Eastern Europe and in the Away-from-Home sector. WEPA Group aims to participate in this growth throughout Europe.”
TWM/7: What are the main challenges?
Otto: “Predictable prices and availability of raw materials can be partially achieved by a foresighted planning and long-term contracts with suppliers. In order to further invest in efficiency and flexibility in the capital-intensive paper sector, it is also important to ensure delivery volumes and income. We achieve this by good customer relations, a high service level and customer-specific, innovative products. Another main sector will be the energy situation. We especially pay attention to the topic of energy efficiency in continuous improvement and special projects. Here we still see potential for savings that we can generate in cooperation with the machinery suppliers.”